Just want to know that does the traffic system should be used only with the given or provided city assets with the package or we can use the FSM provided with your package with any characters or cars of our choice ??
Yes sure, logic is separate so you can change pedestrians/cars/roads with other models.
For pedestrians they are humanoid NavMesh agents with Animator.
Change mesh for cars and adjust some parts for the new vehicle (wheels, AI look objects, obstacle radius).
If you make your own (or change) modular roads, you can put the same logic on top of it. Or if you use EasyRoads or other roads that are not regular, you still can use the same logic just need to adjust waypoints accordingly. Attached a preview screenshot.